Cut 40 pieces of yarn at 11 inches. Cut a 3/4 inch wide piece off the end of an empty toilet paper tube. Fold one piece of yarn in half, creating a loop, and place the loop through the center of the tube.
Reach through the loop to grab the tail ends of the yarn, then pull them through the loop to the right, pulling them tight.
Repeat 35-40 times until the entire tube is covered with yarn. Then grab all the tails of yarn, twist them together, and push them through the tube. This hides the knots and creates a "brim" for the hat.
Cut 7 pieces of macrame cord at 11 inches. Fold one piece in half, creating a loop. Place the loop through the center of a wooden right.
Pull the tail ends of the yarn through the loop and then pull them to the left, pulling tight. Repeat with the other pieces of macrame cord.
Starting from the bottom, comb out the macrame cord to separate it into individual strands. When it is combed out smooth, cut it into a beard shape.
Glue on the wood bead for a nose.
Place glue on the sides of the wood ring above the beard, then place the hat onto the ring, sliding it down to meet the beard. Use another piece of yarn to tie around the loose yarn to finish the hat.
Trim the excess yarn from the top of the hat and glue on any embellishments as desired. Add a loop to the back to use as an ornament or string it onto a garland if you wish.